COMMENT | the malaysian mail ceased publishing its print paper in 2018, completing a 122-year run. the Tamil Nesan closed in 2019, five years before its centenary. Chinese daily Eastern Daily is the most recent victim, closed in 2021.
They are not alone. A american study found that 1,800 newspapers closed. In mid-2020, News Corp announced that more than 100 newspapers would be stop printing in Australia.
The newspapers that remain alive have shrunk, both in terms of circulation and revenue. The Traffic Audit Bureau, which measured distribution in Malaysia, closed in 2019, so it is difficult to measure the decline.
Industry sources put it at well under a million newspapers sold daily across the country, only about 20% of its peak of 4.7 million copies in 2007.
The number could be even lower, during times when readers were under pandemic-related lockdown.
Is digital better?
You would think that with audiences going digital, the media would bring everything back online that they lost in print. This also seems to be the case with many players entering the market. Why would they, unless it’s profitable?
The internet, particularly the growth of smartphones over the past decade, has put information instantly within the reach of over 90% of the adult population. The best news sites typically reach over a million users per day.
In print, a print run of 100,000 copies can generate RM1-3 million in ad revenue per day, or around RM10-30 per reader.
By comparison, online advertising revenue can vary between one and three sen per user, generating between RM10,000 and RM30,000 in advertising revenue per day, almost 1,000 times less than on paper.
why is this the case? Tech giants – especially Google and Facebook – are able to offer advertising at dramatically lower rates as they access billions of users worldwide.
Advertisers are able to spend less and reach more customers using their giant platforms, instead of buying more expensive advertising directly from media companies.
The drain on the media isn’t just due to intense competition from tech giants. The Internet has also enabled other forms of competition.
Piracy has become a major problem. Pay TV providers such as Astro have been hit with streaming boxes able to offer the same pay channels for free via a one-time purchase or via a monthly subscription at a much lower price.
Astro is able to hold onto older, less tech-savvy audiences, but has found it difficult to capture new audiences.
Piracy is also a major problem for news sites – their original content is often copied and republished on anonymous websites, which earn revenue by working with advertisers.
This form of piracy constitutes copyright infringement and reduces advertising revenue for copyright holders. However, little action has been taken by the authorities to combat this form of theft.
The media market has also become global. The Malaysian public can access many media sites on many platforms, both for entertainment like Youtube, Netflix and Disney+, for news or entertainment sites. Malaysians are no longer confined to Malaysian-based media.
The internet also offers a lower barrier to entry. Anyone can create a content site overnight, from serious publishers to bloggers and influencers.
Brands also no longer depend on the media to get their message across. From billboards to email campaigns and social media pages, brands are now investing heavily in building a direct relationship with their existing and potential customers, not relying on digital and traditional publishers.
So why isn’t there a lot of effort to save the industry? There is little pressure from the client or the public. In fact, from the perspective of the connected public, this is a golden age of information.
They have access to more media choices than ever before. Media is now more engaging, faster and cheaper than ever. Evil for the industry is a boon for the consumer.
In response to this disruption, the print and broadcast media had to drastically reduce their staff. Retrenchments, newspaper closings, reduction in hiring have all taken place.
How to save the industry?
There are a few schools of thought and approaches. One approach has been to get those who have benefited from digital disruption to contribute to the industry.
For example, in early 2021, the global media industry observed Australian media lobbying and getting the government to pass legislation (officially called the News Media and Digital Platforms Mandatory Bargaining Code) that forced the tech big boys Google and Facebook to negotiate an income-sharing agreement with the media.
The law strengthened the position of Australian media to demand a higher share of advertising revenue.
However, it is still unclear to what extent the media have benefited from this and whether these benefits will also accrue to local and smaller players.
Elsewhere, there are also reports that Google has agreed to pay French publishers for news.
This approach also has some support in Malaysia. Sinar Harian Ahmad Nazri Mohd Noor, Acting Director of Product Development and Data Management, said, “News portals are the opposite of fake news.
“(News portals) are reliable and authoritative. Therefore, social media platforms should pay for the content that the media produces every day.”
He warned that relying on digital advertising and subscriptions alone might not be enough to cover costs and called on the media industry to work together to pressure the government to act.
“The Malaysian government should facilitate cooperation between social media platforms and news portals to facilitate revenue sharing from social media platforms to news portals,” he added.
Other approaches required the media to be more agile and to adapt quickly to changes.
“The reality is that print media audiences have shrunk and become fragmented with more audio and video, hence the proliferation of distribution channels or non-news platforms,” said Malaysian insight epublisher and CEO Jahabar Sadiq.
“Our choice is simple, we follow and grow the audience of those channels – more video, audio and to some extent long-form journalism – which may be sponsored, or have paid content and subscribe to .”
He argued that breaking news and topical news should be sacrificed in order to appeal to an informed audience that is willing to pay for quality news content.
“In the Malaysian context, this will mean linguistic and demographic differentiation to broaden sources of income.”
He said one way to reduce costs is for the industry to accept “a common payment gateway, a wallet infrastructure available to all subscribers…then we’ll make it simpler, cheaper and better for all of us. to do business”.
“What should differentiate us is our approach to journalism, so giving a choice of news and content rather than having too many platforms and payment options,” he said.
TheVibes.com editor Terence Fernandez also called for innovation, but more in terms of the advertising model.
“Many companies’ advertising budgets have now shifted from marketing to communications. With this in mind, media outlets should consider venturing into the realm of reputation management, communications consulting and training.
“At first glance, this is a fine line to tread as it will challenge the impartiality and independence of the press. However, it is no different from the current challenges of having customers paying for the advertising space.
“The ethical vs revenue dilemmas will always be there, but in my experience, maintaining editorial integrity is a selling point. Authentic brands will want to be associated with organizations that inspire public trust.
“Just think how many times, as individual journalists, have we been approached by politicians, CEOs, PR practitioners, etc., for free advice?” said Terence, suggesting that this relationship can be monetized.
PREMESH CHANDRAN is CEO and co-founder of Malaysiakini.
This was first published in MediaMalaysia.
